The Grameen Crédit Agricole letter

The Grameen Crédit Agricole letter
Number 4 – October 2011
EDITORIAL FROM JEAN-LUC PERRON
The concept of Social Business was invented in 2007 by
Professor Yunus1 before the crisis shook the firmest pillars
of our financial and economic model and put into question
the best-established certainties of economic thought.
Designed first as a response to the problems of poverty and
access to essential goods in developing countries, this
innovative approach seems increasingly relevant in the
context of our very developed countries. Each day, situations of precariousness and
exclusion in Europe grow because of the crisis. While the traditional approaches – be
they social protection systems or action by charities – are no longer enough, Social
Business can make its own contribution, reconciling solidarity spirit and enterprise
spirit. A sign of this interest is the European Commission’s “Social Business Initiative”,
which seeks to put social entrepreneurship and social economy at the heart of the
Single European Market. Commissioner Michel Barnier’s office has just conducted
public consultation to develop legal framework favourable to the creation of Social
Business Investment Funds. Grameen Crédit Agricole Microfinance Foundation
responded jointly with Amundi, a Crédit Agricole Group subsidiary specialised in asset
management2 .
This keen interest in Social Business is encouraging, but includes the risk that this
term, which is not protected by any certification, be confused with the much broader
one of “corporate social responsibility” and be claimed by any initiative or business
having even an indirect impact. Let us reiterate: a Social Business is a business at the
service of a social mission. Social impact is at the heart of its project. This business
must be managed prudently and is designed to be profitable, yet profit made is not
intended to make its stakeholders rich, but to consolidate and expand its social impact.
Grameen Crédit Agricole Microfinance Foundation has been given the mission of
promoting this approach and of facilitating the creation of Social Business projects in
developing countries. In keeping with it, we are working actively in creating a Grameen
Crédit Agricole Social Business Fund, which will enable the Foundation to make this
mission more visible and allocate it greater resources. Along with help from socially
motivated investors and in partnership with companies that want to put their
professional expertise at the service of development, we would like to be “project
facilitators”3 in order to give the poorest access to essential goods and services they
are deprived of. The Foundation’s Board of Trustees is encouraging us in this pioneer
initiative.
1
2
3
See: “Creating a world without poverty. Social Business and the Future of Capitalism”, 2007,
Public Affairs, USA
Read this response (PDF)
“Facilitateurs de projet”: This is the title used by the newspaper Le Monde in its interview with
me in its 13 September edition. For more information (PDF)
NEWS
7th Meeting of
Foundation’s Board
The Foundation’s Board of Trustees
held their 7th meeting, on 16
September 2011 in Luxembourg.
The meeting was chaired by Mr
René Caron and saw participation
by H.R.H. the Grand-Duchess of
Luxembourg and Prof Muhammad
Yunus, among others. The Trustees
were able to take stock of the
progress in microfinance investment
and
in
initiatives
concerning
agricultural micro-insurance and the
Social Business fund project.
The Board co-opted two new
trustees: Mr Jean-Marie Sander,
President of Crédit Agricole SA, and
Mr Christian Talgorn, President of
Crédit Agricole’s Caisse Régionale
du Morbihan. It paid homage to Mr
Luc Démazure, who after a 3-year
term is leaving the Board and the
Projects Committee, of which he
had been chairman since its start.
The Board renewed the terms of
office of the other trustees.
HKL Visits Crédit Agricole’s
Centre-Est Headquarters
Comparative Study on the Foundation’s Position in
Microfinance
In August 2011, Symbiotics Research & Advisory SA published the results of
its annual survey on the evolution of Microfinance Investment Vehicles (MIVs).
As of 31 December 2010, there were 102 active MIVs managing nearly 7
billion dollars of assets.
The comparative study, with the figures of the portfolio of operations approved
by the Foundation as of 30 June 2011, reinforces the Foundation in its
strategic choices and in its specific positioning.
The study shows that the Foundation:
A delegation of five managers from our
Cambodian partner Hatta Kaksekar Ltd
(HKL) visited the headquarters of Crédit
Agricole Centre-Est in Lyon on 31 August.
They were met by Raphaël Appert,
Managing Director of the Caisse Régionale
and Trustee of the Foundation, as well as
by Nicole Lavocat, Marketing Director. This
visit was part of HKL reflections on its
strategic development plan.
After a presentation about Crédit Agricole
Centre-Est, the HKL managers visited the
Chazay d'Azergues local agency and its
president’s vineyard, followed by a “Point
Vert” tobacconist’s, where basic banking
services are provided so that customers
don’t have to travel to an agency.
The managing director of HKL, Mr Hout
Leng Tong, was delighted with the visits
and stated that his team was able to “take
advantage of good advice, such as on
funding successful farming activities...
savings mobilization and how technology
and the Management Information System
helped facilitate operations... They were
also very impressed by one of the Crédit
Agricole agencies, with its broad portfolio,
large number of clients, and the fact that
there are more machines who work there
than employees!”.
To find out more
- Works as a matter of priority in Africa.
This region represents 35% of its investments, compared to an average of 7%
in the investment funds analysed by Symbiotics.
- Invests mainly in tier 2 and tier 3 MFIs.
The average amount of loans granted by the MIVs analysed represents USD
1.7 million compared to 1.1 million for the Foundation
- Supports mainly the MFIs with a strong social mission and that work in
rural areas (76% for the Foundation compared to 44% according to the
Symbiotics survey), with women (92% compared to an average of 60% for the
MIVs analysed by Symbiotics) and with the poorest people. The average
amount of loans granted by institutions financed by the MIVs of the Symbiotics
survey is 7 times higher (USD 1,632) than the average loan granted by the
Foundation’s partner institutions, or USD 221.
- Neutralises the exchange risks of partner MFIs by lending mainly in
local currency.
The ratio of loans in local currency among MIVs surveyed by Symbiotics is
33%, compared to 93% for the Foundation.
To find out more
New Investments
The Malagasy MFI TIAVO has benefited from a guarantee of 245,000 EUR
over three years, representing 50% of a loan granted by a subsidiary of the
Crédit Agricole group, Banque Nationale d’Investissement (BNI Madagascar).
This loan is going to enable Tiavo to develop its action with small-scale
farmers of the Fianarantsoa region.
The Foundation has also granted Thaneakea Phum Cambodia (TPC), an MFI
working mainly in rural Cambodia, a second loan in Thai bahts. The amount is
equivalent to 1 million US dollars, and it will be for a 3-year period with a
maximum grace period of one year.
FOCUS IMF
FOCUS PARTNERS
HKL (Cambodia)
Created in 1996 as an NGO, thanks
namely to support from OCSG/OXFAM,
Hatta Kaksekar Limited (HKL) obtained
MFI status in 2001.
It is one of the largest MFIs in Cambodia
and works actively in 13 provinces of the
country. This is especially thanks to the
size of its portfolio, valued at 39.2 million
euros in June 2011, and to its 53,569 active
borrowers.
It works mainly in rural areas (77%) and
with women (78% of borrowers).
HKL loans granted for agriculture represent
34% of its portfolio.
HKL offers mainly individual loans in
dollars, whose average amount is 732
euros.
Foundation Grameen Crédit Agricole has
granted HKL a loan of 2 million US dollars
over three years.
Babyloan
In September 2008, Babyloan was launched by the limited company ABC
Microfinance, founded by Arnaud Poissonnier and Aurélie Duthoit, along with
collaboration by the NGO ACTED and the bank BRED. Babyloan is an Internet
portal making it possible to collect loans from Internet surfers – the
“Babyloanians”, who are currently 12,000 in number – in order to finance
projects by small-scale entrepreneurs based in development countries. It
represents an extra source of financing for the website’s MFI partners.
Besides fund collection, Babyloan plays an active role in awareness-raising
and education about microfinance among a broad general public, especially on
such occasions as the “Rencontres de Babyloan” gathering in Paris or the
“Babytour” throughout France.
Today, after three years of existence, the platform is developing fast and is the
foremost European platform of solidarity microcredit. More than 33,500 people
have seen their living conditions improve thanks to the 2,200,000 euros
collected, which have enabled the financing of more than 6,708 projects
throughout the world.
The “Finansol” label and “Entreprise Solidaire” state approval were recently
conferred on Babyloan, and in July the World Bank awarded it its financial
innovations prize.
The Foundation holds 5% of the capital of ABC Microfinance. It has been
joined by several Crédit Agricole Caisses Régionales that have found appeal
in Babyloan team’s very strong commitment to responsible microfinance as
well as its entrepreneurial and innovative spirit. Thanks to the partnership that
links the Foundation and Babyloan, the Foundation’s MFI partners can have
access to new sources of financing, and contacts have been established in
particular with Crédit Agricole’s Caisses Régionales.
You’re invited to become a Babyloanian!